Boost to Belarus' potash industry: Russia building new processing complex near Starobin potassium salt deposit

Boost to Belarus' potash industry: Russia building new processing complex near Starobin potassium salt deposit

Belarus launches a large-scale project. A mining and processing complex will be erected near the Starobin potassium salt deposit. On September 11, there was launched the construction of the company that is expected to further strengthen the positions of Belarus in the global potash market. Last Friday, the Belarus President laid a capsule at the site of the future plant and talked with locals.

The new complex will be one of the three major projects in the Belarusian potash industry. In addition to upgrading its own mines Belaruskali took up the development of the Petrikov deposit.  

The project in Belarus is being carried out by Slavkaly - the subsidiary company of the Russian businessman Mikhail Gutseriev.

Mikhail Gutseriev, chairman of IOOO Slavkaly:
One time he said to me and I was so surprised: 'You know, Misha, I beg you about one thing. I don't need anything personally. I've never asked for anything. Do it for Belarus. If you see a brick lying somewhere take it and bring to Belarus. That's what I want from you. Nothing else.' I was shocked.

More than 1.5 billion dollars will be invested in the new combine. As is known, the construction will be carried out using Chinese loans. At the same time, Chinese partners guarantee sales of the plant's products.

Mikhail Gutseriev, chairman of IOOO Slavkaly:
I hope that in five years we will start. This will be just a point of growth that will allow us to recoup the project more quickly. But we calculated it in terms of today's prices. At today's prices it will pay off somewhere in 2030. During this time, we will get back all of the investment and pay to the budget of Belarus $8 billion.

Today, Belarus earns on fertilizers about three billion dollars annually. The launch of the combine in 2017 will allow getting another $1bn.

Alexander Lukashenko, Belarus President:
I have just ordered the chairman of the executive committee and the governor to completely revise the master plan for Luban. By the end of the construction of the complex - somewhere 4-5 years at the most - Luban should change dramatically. The town must be the most modern, the most beautiful and functional.
By the way, this plant will be built thanks to Chinese loans. Up to $2 billion. It is a good investment. We need to use $7 billion of Chinese money in these difficult times cleverly. This money should help us overcome these years of crisis.

Counting bonuses for Belarus experts consider the project, which is carried out by Belarusian specialists abroad - the Garlyk Mining Plant, which is now being erected in Turkmenistan.

Georgy Grits, deputy director of the Center for Contemporary analysis and Strategic Studies, National Academy of Sciences:
The commissioning of these facilities will significantly increase the share of the Belarusian trader. And as a consequence, its role on the global potash market will increase. Of course, there are positive advantages. We are first of all talking about the creation of new jobs and as a result, foreign currency earnings. This will make the Belarusian currency stronger and more stable.

Today, Belarus is among the largest players in potash markets. Other major players are Russia and Canada. This "triple" makes up two-thirds of the global market.

Before the crisis in 2008 price of a ton of potassium reached $1,000. After surviving a drop to $240, the market is gradually recovering. Today, the per-ton price of potassium is over $300.

The team of Belarusian Potash Company (BPC) worked properly. Including in the situation with Uralkali. By the way, the Russian company has already asked the Belarus President to re-engage.

Alexander Sinkevich, economist:
The global market for potassium has not been in the best condition in the past few years. Its collapse was caused by a scandalous incident, the collapse of the cartel between Uralkali and Belaruskali in view of the incorrect actions of the Russian side. But now, for the last two years, the situation has stabilized. Prices returned to an acceptable level ensuring profitability and good production volumes. And prices are recovering. Therefore we can say that the global potash market is coming out of its coma and back to normal mode, which will allow us to sell large volumes at a fair price.

Sales of fertilizers, including those of the Nezhinsky plant will go through a Belarusian potash trader. Logistics and product range helps compete in the market.

Yelena Kudryavets, Director General of OAO Belarusian Potash Company:
In the first nine months, we have posted even better results than last year. And we still have the fourth quarter ahead.  Of course, the demand due to the devaluation of local currencies and prices of agricultural products has decreased a little. But we have to focus on what is happening in the world. In any case, what we have today is an excellent result.

Mikhail Myasnikovich, Chairman of the Council of the Republic of the National Assembly of the Republic of Belarus:
Today, when we see that the potassium market is not that profitable, we have to extract some chemicals, including hydrochloric acid, alkali and other things. The same goes for forest resources and petrochemicals. We need to get the most of it all.

For the first time, a private person takes part in the development of mineral resources in Belarus. People raised some questions in this regard. After talking with the residents of Luban District and builders of the future mining and processing complex, the Belarus President particularly noted that no one will be allowed to make illegal profits from state property.

Alexander Lukashenko:
He will not offend my people. It is important. He will pay taxes. He will return the money he borrowed. I am convinced of this. Therefore, I absolutely don't worry that we are giving Belarusian lands to this person. We do not actually give anything to anyone. This is still ours.  We are not crooks. You can reproach me of anything but not cheating. No, I don't do this and I will not allow anyone to do this. During the 20 years no one profited from state property illegally.